The residential bridging market has its attractions but has become a crowded market place led by the promise of low interest rates combined with high expectations, says Alternative Bridging Corporation Limited (‘Alternative’).
Brian Rubins, Director at Alternative commented “Commercial Loans on the other hand, for the property industry and business community are different. There are fewer brokers and the volume is larger – not by the number of loans but in their collective value.
“The reasons for commercial loans vary enormously. It may be a vacant retail unit waiting for a new tenant, an office building being developed under Permitted Development Rights or perhaps an industrial estate with some vacant or poorly let space in anticipation of refurbishment or new tenants or for the leases to be improved.
“As residential development loans expire, the completed but unsold homes, can be refinanced via a commercial bridging loan, removing the pressure to repay the development finance provider, releasing capital and reducing the cost of borrowing while maintaining the developer’s relationship with the original lender, opening the door to undertake the next project with them.
“So, “commercial” means different things to different people but there is one common interpretation, a golden opportunity for brokers to do more business. A win, win situation for all parties.